Formulary compliance and pharmacy labor costs associated with systematic formulary management strategy

Abstract

The impact of a comprehensive hospital formulary management system on formulary compliance and pharmacy labor costs was evaluated. The formulary management system consisted of monitoring nonformulary medication use, reviewing formulary medication use annually, and providing periodic feedback. Workflow scenarios for nonformulary medication requests were identified. Pharmacy personnel were interviewed to obtain the probability of occurrence of each scenario and the time involved. Labor costs were determined by multiplying the average total minutes spent on each activity by the corresponding average salaries per minute. Formulary compliance was compared before the implementation of the formulary management system (January to June 2008) with six consecutive six-month periods after implementation. Nonformulary medication use decreased from 17.8 to 5.9 nonformulary medication initiations per 100 admissions over a three-year period (p < 0.001). Time and labor costs associated with managing nonformulary medication requests varied from 4 to 69 minutes and from $3.68 to $27.28, respectively, depending on the scenario used. Automatically converting to a formulary alternative was the least labor-intensive option ($4.40 per request), followed by changing to a formulary alternative after consulting the prescriber ($9.92). A comprehensive formulary management system resulted in increased compliance to a formulary that matched the needs of the institution and minimized the number of nonformulary medication requests. Expanding pharmacists' therapeutic interchange authorities was the least labor-intensive way of managing nonformulary medication requests, and adding the most frequently used nonformulary medications to the formulary was the second least costly option.